Appraisal Clause

An appraisal clause, often found in insurance policies, is a provision that allows policyholders and insurance companies to resolve disputes over the value of property or damages through an independent appraisal process. If the insured and insurer disagree on the value of a claim, either party can invoke the appraisal clause to have a neutral third party, called an appraiser, assess the value.

The appraisal clause is designed to provide a fair and efficient method for resolving disputes over property values or damages, helping to avoid costly and time-consuming litigation.

Typically, each party selects an appraiser, and these two appraisers then work together to determine the value. If they cannot come to an agreement, they may choose an umpire, or a neutral third party, who will make a final decision. The decision reached through this process is usually binding, meaning both parties must accept it and cannot pursue further legal action regarding the valuation of the claim.